Apple Inc. is considering the following mutually exclusive two projects A in Germany and B in India (i.e., can choose either one but not both.): Year Cash Flow (A) Cash Flow (B) Net Income (A) Net Income (B) 0 -2,000,000 -400,000 ---- ---- 1 200,000 160,000 120,000 100,000 2 500,000 120,000 200,000 75,000 3 500,000 150,000 0 100,000 4 2,500,000 200,000 800,000 -50,000 Based on the project risk characteristics, the company requires a 15 percent return on Project A and 10 percent discount rate on Project B. Average book assets for projects A is 1,000,000. Average book assets for projects B is 200,000.

a. The company requires a payback period of 3 years, which project should be taken? Show your calculation. (3 marks)

b. The company requires a discounted payback period of 3 years, which project should be taken? Show your calculation. (3 marks)

c. If the company applies the NPV criterion, which project should be taken? Show your calculation. (4 marks)

d. If the company applies the Average accounting return rule. The company requires an AAR of 30%. Which project should be taken? Show your calculation. (3 marks)